| The right of control is the core of the corporate governance with a greattheoretical and practical value. In recent years, the focus of the scholars’ researchesfrom the Mainland, is on the dynamic control rights market theory in the early times,and gradually turns to the static structure analysis of control rights, including thenature, the appropriate allocation, the regulation of the exercise of the control rightand so on. The GOME Case which happened in2009and2010and contained thefundamental factors of the control rights theory, has become a classic case for thestudy on the theory of the control rights.This article through the analysis of the relevant works and paper elaborates thecontrol right source, the evolution, the subject, the main content, the implementationprocess in a issuer company, the legal nature, the main classifications of the controlright, which form the multi-level and multi-dimensional control rights system.The right sources come from the equity, the authorization, contracts, law, etc..Control rights have already existed before the separation from ownership, butmeaningful after the separation. The subjects of the control rights are not onlyshareholders, but also the directors, supervisors and managers at all levels andemployees. The realization of the control rights in the enterprise depends on theauthorization and the organization with divisions. The general meeting ofshareholders has the ultimate control. The Board of Directors is authorized by theshareholders’ meeting to make the day-to-day decision, and the management isauthorized by the Board of Directors to do the day-to-day management.In fact, the corporate control is a process which makes use of the authorizationof the system, and the organization of the hierarchical order to run the power. Thecontrol rights reflect the combination of rights and powers, for rights are mainlybased on the shareholders ownership, and powers are from the management by the authorization and in the organization with divisions.On the content of the control rights there are two points of view: the decisiontheory and the right to vote theory. However, both of them have the advantages anddisadvantages. The view on the right to vote emphasizes on the voting mechanismand the share of the voting rights of shareholders, but it can not contain all theconditions. The view on decision theory is aimed to the results achieved by thecontrol, which is difficult to judge in practice. Therefore, it shall be applied with thecombination of two points of views, and the key of the corporate control is to controlthe Board of Directors.The control rights system has multi-level and multi-dimensional natures. Themulti-level of the control rights refers to the control rights are authorized by levelsand down to the lower manages from the shareholders’ meeting to the Board ofDirectors, supervisors, managers and other company stakeholders as different levelsof control subjects and controlled objects, and who access to different levels of thecontrol rights over it. The multi-dimensional of the control rights refers as: accordingto the entire system of the control rights, the general content of the control rights isthe voting rights and decision-making power; while in accordance to the differentlevels of the control rights over the system, control rights performance differently atdifferent levels, and the subjects at each level shall apply different tools of the controlrights.The multi-level and multi-dimensional system makes the control rights all kindsof forms and contents. Addition to (1) the specific control right and the residualcontrol right in accordance with the contractual theory of the enterprise, you can alsohave the following classifications:(2) the risk of the control right and the operationalcontrol right according to different contents;(3) the ultimate control right and a smallnumber of the control rights according to the effectiveness and strength of the controlrights;(4) the control rights based on the subject’ own right or the authorized rights.The allocation of the control rights is also the embodiment of the multi-level andmulti-dimensional nature. In this paper, historical and country-specific comparisonsanalysis are made to show the evolution process of allocation of the control rightsduring different historical periods and different countries in the present. It analyzes the characteristics of the external-attributed control rights in USA and UK, andinternal-attributed control rights in Germany and Japan. It concludes that it shall bethe appropriate allocation of the control right of the issuer companies in China if itgives the first place to the internal-attributed control rights, combined with theexternal-attributed ones.There is a lot of phenomenon of internal control and abuse of the control rightsamong the issuer companies in China. The unreasonable allocation of the controlrights exists in many companies, and the contest for the final control right of theissuer company takes place frequently. The nature of GOME case is the conflictbetween the shareholders and the managers, and the unreasonable allocation of thecontrol rights makes it apparent and intense.The paper provides the following suggestions according the allocation of thecontrol rights. Firstly, it shall be clarified that the allocation shall be made tomaximize the shareholders’ interests as a priority, and in the meaning times takinginto account of the relevant interest groups. Secondly, establish the institution ofinternal and external constraints mechanism to regulate the control rights. Theinternal constraint mechanism contains the construction of the Board of Directors, theestablishment of the voting trust system to protect minority shareholders, theintroduction of institutional investors to check and balance the management andcontrolling shareholders. External constraints mechanism contains the capital market,the product market, the manager market, the supervision from independent audit andfinancial intermediaries, and the legal system. |
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